Exclusive: DOJ probes allegations that Tiversa lied to FTC about data breaches

Thu Mar 17, 2016 8:42pm EDT
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By Joel Schectman

WASHINGTON (Reuters) - Federal agents are investigating whether cyber-security firm Tiversa gave the government falsified information about data breaches at companies that declined to purchase its data protection services, according to three people with direct knowledge of the inquiry.

The Federal Bureau of Investigation raided Tiversa’s Pittsburgh headquarters in early March and seized documents, the people said.

The Justice Department’s criminal investigation of Tiversa began after Richard Wallace, a former Tiversa employee, alleged in a 2015 Federal Trade Commission hearing that the cybersecurity firm gave the agency doctored evidence purporting to prove corporate data breaches, the people said.

Wallace testified that Tiversa falsified information to make it appear that sensitive data was being accessed by users across the country.

Tiversa's information led the FTC to examine whether companies failed to protect consumer data, according to testimony from Wallace and people with knowledge of the FTC inquiries, which can lead to civil charges and settlements with the companies.

David Schertler, an attorney at Schertler and Onorato LLP who is representing Tiversa, said the company is cooperating with the investigation.

Spokespeople for the Justice Department, the FBI and the FTC declined to comment.

The blog Databreaches.net first raised the possibility of an FBI raid on Tiversa earlier this month, citing a photo of black vehicles outside the company’s office that was posted on Twitter.   Continued...

The Department of Justice (DOJ) logo is pictured on a wall after a news conference to discuss alleged fraud by Russian Diplomats in New York December 5, 2013.     REUTERS/Carlo Allegri (UNITED STATES - Tags: CRIME LAW) - RTX1657T